20 JULY 2020


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Article from BTNews 20 JULY 2020

American airlines

Forbes Magazine in US airlines exposé.

American Airlines made a dire announcement this week warning 25,000 workers they may be furloughed or laid off Forbes reports.

These staggering Covid-19 numbers represent roughly 20% of the company’s workforce. The airline’s message echoed rival United Airlines’ sombre news of telling around 36,000 employees that they could be dealt with the same way starting 1 October. Elsewhere Delta says that 20,000 staff, out of a total 91,000, have applied for redundancy.

American Airlines, along with other major carriers, collectively accepted about $25bn from the United States government, as part of the multitrillion-dollar stimulus package. The terms called for the companies, in part, to use the funds for retaining workers. The government set forth a specified time period ending on 30 September.

The much-needed turnaround hasn’t happened, which places intense pressure on American Airlines to cut costs.

Doug Parker and Robert Isom, the respective CEO and President of American Airlines, wrote in a memo to their employees about the likelihood of the upcoming layoffs. “We hate taking this step, as we know the impact it has on our hardworking team members.”

As chairman and CEO, Parker made $11,571,714 in total compensation for 2019 and the company’s senior executives collectively about $20m.

What upsets Forbes is that it does not expect CEOs and executives to have crystal balls and be clairvoyant about the future. “However, it does seem reasonable to expect for them to always look out for the worst-case scenario and have a plan for when things go wrong, as there will always be expected bad times. Just like they took care of shareholders and executives via dividends and buybacks, the highly compensated executives should also be responsible for looking after their own employees.”

"The executives all received their millions of dollars and don't have to worry too much about their futures. Meanwhile, their employees will be thrown into the worst job market since the Great Depression”.  Forbes is very clear on what it thinks of American Airlines top management."




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Albert Jones, London

Am I correct that here in the UK both Walsh and Holland-Kaye have taken pay cuts